Opinion
No. CV-S-97-1492-KJD (RJJ)
April 8, 2002
Jeffrey S. Jacobovitz, Nancy Nunan, Kutak Rock, Washington, DC, Gregory Kamer, Edwin Keller, Kamer Zucker, Las Vegas, NV, for Plaintiff's
Jerry C. Alexander, Passman Jones PC, Dallas, TX, Kevin Efroymson, Kevin C. Efroymson, Gary Moss, Gary C. Moss, Counselor at Law, Las Vegas, NV, for Freeman Companies, Dale A. Dannenman, Richard Halloran, Lewis Roca LLP, Phoenix, AZ, Gregory Smith, Smith Kotchka, Las Vegas, NV, for GreyHound Exposition Services, Dennis Kist, Kist Association, Las Vegas, NV, George A. Pappy, Pappy Davis, Burbank, CA, for Teamsters 631.
ORDER
Presently before the Court are Motions for Summary Judgment of Defendants GREYHOUND EXPOSITION SERVICES, INC. (#146), FREEMAN COMPANIES (#147) and UNITED BROTHERHOOD OF TEAMSTERS LOCAL 631 (#148). Each of the moving defendants has filed joinders in the other defendants' motions for summary judgment (#150, 166 and 172). By order entered and served on the 5th day of October, 2000 (#158), the Court granted Plaintiffs' Motion for Permission to file Consolidated Memorandum in response to the multiple motions for summary judgment. Plaintiffs then filed their Opposition (#159) and Defendants filed their Replies (#165, 168 and 169). Defendants also filed motions to strike exhibits (#170) and evidence (#171) submitted by Plaintiffs in their consolidated opposition. The motions to strike have been denied subject to the Court's consideration of the objections as necessary in ruling on the motions for summary judgment.
FACTUAL BACKGROUND
The instant action involves a labor dispute between certain independent trade show contractors, all members of Plaintiff, NEVADA INDEPENDENT SERVICES CONTRACTORS ASSOCIATION ("NISCA"), a trade association which bargained on behalf of its members and Defendant Local 631 of the International Brotherhood of Teamsters, Chauffeurs, Warehouseman and Helpers of America ("Local 631"). During the summer of 1997, Plaintiffs and Defendant Local 631 were attempting to renegotiate their collective bargaining agreements which had terminated May 31, 1997. After failing to reach agreement, NISCA Contractors unilaterally implemented the provisions of their final proposal which had been rejected by the union. On October 7th, Local 631 struck the NISCA Contractors and established a picket line against them outside the Sands Expo and Convention Center in Las Vegas, Nevada during the move-in and installation of the Pack Expo West and Food Processors Trade Shows. These shows were scheduled to open October 13th. That action brought the move-in of the trade shows to a standstill when Local 631 and employees of other contractors refused to cross the picket line. By October 22nd, seven NISCA contractors had signed new agreements. Plaintiffs filed suit on October 23rd, alleging antitrust violations and various state law claims. Although the picket line ended only an hour or so after it was formed, the strike against Plaintiff independent trade show contractors continued until they each signed an agreement. The last independent contractor signed or agreed to sign on November 11, 1997, at which time the strike ended.
Plaintiffs' complaint alleges an illegal conspiracy between Defendants FREEMAN COMPANIES ("FREEMAN"), GES EXPOSITION SERVICES, INC. ("GES") and Local 631. Plaintiffs argue that Defendants violated antitrust laws and Nevada state law by combining to prevent Plaintiffs from providing installation and dismantling services at trade shows in Las Vegas, Nevada and then allowing Plaintiffs to provide their services only on terms that were less competitive, causing a decrease in quality to Plaintiffs' exhibitor customers. Plaintiffs have produced evidence which they claim is sufficient to meet the standard for demonstrating an antitrust conspiracy. Plaintiffs contend that although they do not have direct evidence of an illegal agreement, circumstantial evidence is sufficient to exclude the possibility of unilateral action on the part of the Defendants and establish a reasonable inference of an illegal conspiracy. Plaintiffs contend that Defendants' conspiracy is illegal under the per se rule because there was a successful group boycott involving horizontal competitors of Plaintiffs. Alternatively, Plaintiffs claim that Defendants collectively had sufficient market power to actually exclude competition, thereby rendering the conspiracy illegal under the rule of reason.
Defendants claim that Plaintiffs have no direct or circumstantial evidence of a conspiracy and that both the statutory and non-statutory labor exemptions to the antitrust laws are applicable. Plaintiffs respond that because of the evidence that Local 631 combined with non-labor parties to cause an anti-competitive impact, the exemptions are inapplicable. Defendants dispute the admissibility of evidence submitted by Plaintiffs in opposition to the motions for summary judgment, invoking objections of hearsay, authenticity, non-expert opinion testimony, unverified interrogatory answers, lack of foundation, conclusory, argumentative, speculative, and lack of evidentiary support. Plaintiffs respond to each of the objections in their oppositions (#174, 175). The Court will not here attempt to deal with each and every objection and response because, for purposes of the instant motions for summary judgment, it is unnecessary to rule on each and every objection. The real issue in this case is whether there is any significant probative evidence tending to support the allegations of the antitrust complaint.
Summary judgment is disfavored in complex antitrust litigation and is appropriate only in the clear absence of any significant probative evidence tending to support the complaint. See Movie 1 2 v. United Artists Communications, Inc., 909 F.2d 1245, 1248-49 (9th Cir. 1990). Summary judgment may be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). All justifiable inferences must be viewed in light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Summary judgment shall be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. Summary judgment shall not be granted if a reasonable jury could return a verdict for the nonmoving party. See Anderson, 477 U.S. at 248.
The moving party bears the initial burden of showing the absence of a genuine issue of material fact. See Celotex, 477 U.S. at 323. The burden then shifts to the nonmoving party to set forth specific facts demonstrating a genuine factual issue for trial. See Matsushita, 475 U.S. at 587; Fed.R.Civ.P. 56(e). The nonmoving party may not rest upon the mere allegations or denials of his or her pleadings, but he or she must produce specific facts, by affidavit or other evidentiary materials provided by Rule 56(e), showing there is a genuine issue for trial. See Anderson, 477 U.S. at 256; Fed.R.Civ.P. 56(e).
ANALYSIS
Plaintiffs' Complaint alleges a conspiracy between Defendants Local 631, GES and FREEMAN to exclude Plaintiffs from performing installation and dismantling services to exhibitors at trade shows in October of 1997 where Defendant GES and FREEMAN were official services contractors. In support of that claim, Plaintiffs point to Defendants' attendance at meetings where the decision to exclude Plaintiffs was discussed and decided upon and claim that they were able to provide their installation and dismantle services without interference notwithstanding the union strike at all shows where neither GES or FREEMAN was the official services contractor, with only one exception. Plaintiffs allege that the means by which Defendants excluded Plaintiffs from performing services at trade shows was the use of a so-called "labor peace clause" which had never been enforced before or since.
Defendants in their Motions for Summary Judgment, assert the labor exemptions to the Sherman Antitrust Act ( 29 U.S.C. § 152(5)). The first exemption, codified in Section 6 of the Clayton Act ( 15 U.S.C. § 17), protects the activities of labor unions acting unilaterally and in their own interests. The second is a non-statutory exemption implied by congressional policies favoring collective bargaining and free competition. There are, however, limitations on the scope of exempt activities. Labor unions cannot combine with non-labor groups to create monopolies and to control the marketing of goods and services. See Allen Bradley Co. v. Local Union No. 3. Int'l Bhd. of Elec. Workers, 325 U.S. 797, 810-11 (1945). A union-employer agreement that limits the discretion of the employer to deal with third parties is exempt only if it protects a legitimate interest of labor union members. See Local Union No. 189, Amalgamated Meat Cutters v. Jewel Tea Co., 381 U.S. 676, 688-90 (1965). Unions attempting to enforce clauses which prohibit union contractors from awarding contracts to non-union subcontractors violate the Sherman Act and may be held liable for damages to contractors injured thereby. See Connell Constr. Co. v. Plumbers Steamfitters Local Union No. 100, 421 U.S. 616 (1975). In Altemose Constr. Co. v. Bldg Constr. Trades Council, 751 F.2d 653 (3rd Cir. 1985), the efforts of a group of local trade unions to force non-union employers out of the construction market were not protected by the statutory exemption. An alleged conspiracy between a union local and non-labor entity to force an employer to enter into a collective bargaining agreement is sufficient to prevent application of both the statutory and non-statutory exemptions. See Ehredt Underground, Inc. v. Commw. Edison Co., 830 F. Supp. 1083, 1094 (N.D.Ill. 1993).
Defendants contend that circumstantial evidence produced by Plaintiffs must tend to exclude the possibility that the alleged conspirators acted independently because conduct as consistent with permissible competition as with illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy. See In re Citric Acid Litig., 191 F.3d 1090, 1094 (9th Cir. 1999). Defendants contend that the interests of FREEMAN and GES in protecting their substantial investments and reputations by assuring that the trade shows involved were timely installed and presented as scheduled is a plausible and justifiable reason for their conduct, thus rebutting the Plaintiffs' circumstantial evidence of conspiracy. Defendants contend that the evidence produced by Plaintiffs must tend to exclude the possibility that the alleged conspirators acted independently. See id.
Plaintiffs' evidence of conspiracy regarding the exclusion of Plaintiffs from performing work at PACK EXPO WEST centers around a meeting held among representatives of FREEMAN, Local 631 and others, at which Plaintiffs' representatives were excluded. At that meeting it was decided to enforce Show Rule 9, the so-called "labor peace clause," the effect of which was to require that any exhibitor appointed contractors (EAC's) produce evidence that they had current labor contracts. According to Plaintiffs, Defendants and union representatives met with show managers to concoct ways to force NISCA members off the show floor, including suggesting and urging the show managers to enforce the labor peace clause. Also, according to Plaintiffs, Defendants jointly participated in drafting and reviewing letters to exhibitors informing those exhibitors that the NISCA members were to be excluded from performing services and supplying the names of those to be excluded (those without labor contracts). The Plaintiffs have produced evidence that the union stewards played a role in the conspiracy by facilitating and participating in the removal of Plaintiffs from the show floors. Plaintiffs assert that the union stewards were acting on behalf of and as agents for both the union and the official services contractors (FREEMAN and GES) when they did so.
FREEMAN was the Official Services Contractor ("OSC") for PACK EXPO and PMMI ("Packaging Machinery Manufacturers Institute") was the show manager. Bonnie Kilduff was the Director of Expositions of PMMI. Jim Roche was the floor manager/supervisor for PMMI. On October 7th, Kilduff, on behalf of show management, issued a memorandum to exhibitors referencing Rule 9 and advising exhibitors to use either FREEMAN, the OSC for the show, or to use any other EAC that had a current agreement with Local 631. While Defendants deny that FREEMAN suggested the memo be written, it is undisputed that FREEMAN provided information for the memo before it went out. Defendants claim that show management acted unilaterally in sending out the memo but give no explanation as to why FREEMEN personnel were involved in preparing the memo or why exhibitors were specifically told that using FREEMAN was permitted. FREEMAN admits to having supplied the names of the contractors to be listed as excluded. Plaintiffs have also produced an exhibit containing interlineations on a draft PMMI memo. PMMI representatives deny knowledge of the source of the interlineations.
Plaintiffs have also produced evidence that PMMI, FREEMAN and Teamster representatives and officials acted together to physically exclude NISCA members from performing services at the PACK EXPO show. Union and FREEMAN representatives jointly approached booths where NISCA members were working and told exhibitors to get rid of the NISCA members and ordered NISCA workers off the floor. Plaintiffs, in their opposition, have cited other contemporaneous FREEMAN shows wherein FREEMAN enforced the labor peace clause and had NISCA members removed from the floor. This forced Plaintiffs to purchase labor from FREEMAN instead of using their own employees.
Similarly, GES was the OSC for the California Grocers Show and the California Rental Show. Plaintiffs have produced evidence that Plaintiffs' personnel were removed from the floor with the help of GES representatives, Teamsters and the show manager. Plaintiffs have also produced evidence that where other show managers refused to cooperate in excluding NISCA members, they were allowed to work without disruption.
Plaintiffs allege that they have suffered two principal types of damages as a result of Defendants' conspiracy: 1) Lost business in the October 1997 shows from which they were excluded, resulting in lost revenues and profits; and 2) Lost future business from those customers they were prevented from servicing resulting in future lost contracts, revenues and profits. Plaintiffs have produced evidence that if believed would support a finding that Defendants' actions injured competition. Plaintiffs have, for purposes of the instant motions, adequately responded to Defendants' evidentiary objections and the same are overruled.
COLLATERAL ESTOPPEL
Defendant Freeman Companies' Supplement to its Motion for Summary Judgment raises a collateral estoppel defense to Plaintiff Nth Degree. Evidently, a corporate predecessor to Nth Degree, Installation Dismantle, Inc., was a Plaintiff in the prior case, Industrial Merchandising Display, Inc., Installation Dismantle, Inc., and Industrial Design-Display Co. d/b/a Exhibits/Houston v. Offshore Technology Conference Freeman Decorating Co., Civil Action No. 3:81-0543-F (N.D.Tex. 1983) ("OTC case") as was a Freeman Companies' affiliate, Defendant Freeman Decorating Co. In that case, which was filed over 20 years ago, the Plaintiffs alleged that the relevant product market for the provision of ID services to exhibitors at trade shows was a single city, Houston, as opposed to a national market. The trial court held that the relevant geographic market was national.
Defendant Freeman Companies seeks to bind Nth Degree to the determination made by the Texas court that the relevant product market for ID services is national, not a single city such as Las Vegas. Nth Degree maintains that the determination made was not necessary to the court's decision. As such, this Court should not bind it to that decision. Freeman Companies contends that this Court's Order (#181) entered March 20, 2001 determined that the prior case was based solely on this determination. Freeman Companies reads too much into that Order. The Court was merely introducing the factual basis before it rendered a decision on Freeman's motion to amend. The Court did not conclusively establish that the prior case was based on the determination sought by Freeman Companies.
The record before the Court is insufficient to find that Nth Degree should be collaterally estopped from asserting that the relevant product market is Las Vegas, Nevada. Installation Dismantle, Inc. is a corporate predecessor to Nth Degree. The extent of that relationship is not clear on the record submitted. It would be unjust to impose a finding rendered two decades ago on a company that had little to do with the earlier decision. Moreover, the Court is not convinced that the determination made in the prior case was necessary to the decision of the court. Although the nature of today's economy would lead toward of a finding that firms are now not only nationalized, but globalized, Nth Degree should be provided an opportunity to demonstrate that this trend doesn't apply to the ID industry. Accordingly, Nth Degree is not collaterally estopped from asserting that the relevant product market is Las Vegas.
CONCLUSION
Summary judgment is not authorized when the evidence is plausibly consistent with both inferences of conspiracy and inferences of innocent conduct. See City of Long Beach v. Standard Oil Co., 46 F.3d 929, 933-34 (9th Cir. 1995). Summary judgment is disfavored in heavily factual settings such as complex antitrust cases that involve issues of motive and intent. See High Tech. Careers v. San Jose Mercury News, 996 F.2d 987, 989 (9th Cir. 1993); Nat'l Basketball Ass'n. v. SDC Basketball Club, Inc., 815 F.2d 562, 567 (9th Cir. 1987). Here, Plaintiffs' evidence is sufficient to raise a reasonable possibility that Defendants conspired to exclude the Plaintiffs. All that is required is that the antitrust plaintiff present direct or circumstantial evidence that reasonably tends to prove the conspiracy. See Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984). Behavior that shows unity of purpose and the meeting of the minds is sufficient to prove the conspiracy. See William Englis Sons Baking Co. v. ITT Cont'l Baking Co., 668 F.2d 1014, 1055 (9th Cir. 1982).
Construing the evidence in the light most favorable to plaintiffs as the Court must for purposes of a motion for summary judgment, the Court finds that a jury could reasonably conclude from such evidence that an illegal conspiracy existed between Defendants FREEMAN, GES and Local 631 to exclude Plaintiff NISCA members from providing installation and dismantling services in Las Vegas, Nevada during October of 1997.
Accordingly, Defendants' Motions for Summary Judgment (#146, 147 and 148) are DENIED.